If the federal government began granting a subsidy of 10 cents per apple to apple growers and as a result the price of apples to consumers falls by 8 cents,
a. the actual benefit of this subsidy goes mostly to consumers.
b. the actual benefit of this subsidy goes mostly to producers.
c. the actual benefit of this subsidy would be shared equally by producers and consumers.
d. nobody would benefit from the subsidy.
A
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An example of a supplier that used its bargaining power to charge high prices to its customers is
A) the firms that supply paper napkins to McDonald's restaurants. B) the publishers of the Encyclopedia Britannica. C) Wal-Mart, which required many of its suppliers to alter their distribution systems to accommodate Wal-Mart's need to control the flow of goods to its stores. D) the Technicolor Company, the sole producer of cameras and film that movie studios needed to produce color movies in the 1930s and 1940s.
The situation in which expansionary fiscal policy does not lead to a rise in aggregate output is referred to as
A) fiscal neutrality. B) a recession. C) complete crowding out. D) inflation.